Payroll automation refers to the use of computers to produce paychecks and manage benefit payments for a company or community. Often, payroll automation is integrated into the company’s enterprise resource planning system that provides an overall view of the company’s or community’s finances; in addition to payroll, it can manage customer relationships, production, personnel resources, invoicing and accounting.
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Payroll activities
Payroll management consists of several stages and procedures that require expertise in financial administration, such as employment contract management. Payroll management performs the following tasks:
The travel costs and travel invoices from the employees are usually processed together with payroll.
Methods
Payroll functions can be automated using software to facilitate the collection, organization and storage of all information required for payroll calculations and regulatory agency reportage requirements. If the payroll software is not purchased as part of a comprehensive business management system, it can usually be combined with the company’s existing solutions for accounting, sales ledger, working hour management and recruiting. Information that has been captured in one part of the system can be used by other modules. Hours registered in the work management system, for example, are automatically transferred to the wage calculation system.
Benefits
Effective payroll automation collects all relevant information in one place in electronic format, reducing mistakes by eliminating the need to synchronize and manage otherwise duplicate data sets.
This improves the work satisfaction of the wages clerk, as routine work is reduced.
The American Payroll Association (APA) estimates that automation reduces costs related to payroll management by up to 80%, which is partially explained by the reduced mistakes in wage payments and invoicing.
Well planned, modern payroll software provides the following benefits: